Reckitt Benckiser fined £10.2m by OFT

Reckitt Benckiser withdrew Gaviscon Original from the NHS after its patent expired. Photograph: Graeme Robertson

Reckitt Benckiser has been fined £10.2m by the Office of Fair Trading after admitting it abused its dominant position to stop NHS doctors prescribing cheaper alternatives to its heartburn medicine Gaviscon.

The NHS uses a computer system which allows GPs to search for a well-known branded product, and then supply a cheaper generic version if any are available. Reckitt has admitted infringing UK and European competition law by withdrawing and de-listing the original Gaviscon from the NHS in 2005. Reckitt's move meant that when doctors searched under the brand name the prescription system failed to throw up the cheaper generic version, and patients were instead transferred to another Reckitt product, Gaviscon Advance.

Pharmacies that receive prescriptions for Gaviscon Advance must dispense it, as it is patent-protected and there are no generic equivalent medicines.

The fine was reduced from £12m after Reckitt's admission and its decision to co-operate with the OFT.

John Fingleton, the OFT chief executive, said: "Vigorous competition between firms supplying the public sector is vital to ensure taxpayers get the best value for money. This case underlines our determination to prevent companies with a dominant position in a market from using their strength to seek to restrict competition from rivals. The imposition of penalties should serve to deter firms from engaging in anti-competitive behaviour of this sort in future.

"We welcome Reckitt Benckiser's early co-operation which will enable the swift resolution of this complex case and will reduce the costs of the investigation both for the OFT and for the company itself."

Reckitt said: "This OFT investigation relates to an infringement that took place a number of years ago under a highly complex area of competition law, on which there have only more recently been clarifying cases.

"Therefore, while the company believed at the time it was acting within the law, as is always our intent, we respect the view of the OFT in this matter and have agreed to settle."

In March 2008, leaked emails appeared to show that Reckitt employees deliberately tried to delay the introduction of a generic rival to Gaviscon. A senior whistleblower from the drug company claimed that this had cost the NHS millions of pounds.